Question

When there is allocative efficiency in a market, the buyers' maximum willingness to pay for the last unit traded is equal to the sellers' minimum acceptable price for that unit. True or false
a. True
b. False?

Answer 1

That answer is A. True

Answer 2

Answer:

The correct answer is letter "A": True.

Explanation:

Allocative Efficiency takes place when the preferences of the consumers are the priority. Under that scenario, the output level of the price of a product equals the marginal cost of production. This happens as a result of the consumers' willingness to pay for the product a price that equals the marginal utility of the producers.